Cost Control :
Tender /Construction
BoQ - Schedules
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Tender/Construction
• Greater precision in cost control is
required during tender& construction
phase.
• There is greater certainty as the design
nears completion.
• Design can be compared against the
assumptions of earlier cost plans.
Previous cost plans will be updated.
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Tenders
• Tenders are built on drawings and
specifications
• The work can be quantified on elemental,
work package or item basis.
• The contractor can quantify the work.
• In most cases consultants quantify the
work as a Schedule of Rates or a Bill of
Quantities
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Bills of Quantities/ Schedules
• Structured approach to pricing.
• All in elements – no separation of labour,
equipment and material.
• Two standards NRM2 and CESMM4
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BOQ Benefits
• Assist with the agreement of the contract
sum with the successful tenderer.
• Provide a schedule of rates assisting with
the valuation of variations.
• Provide a basis for the valuation of interim
payments.
• Provide a basis for the preparation of
the final account.
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• Preliminaries
• Measured works (including ‘Contractor Designed Works’)
• o – Facilitating works
• o – Substructure
• o – Superstructure
• o – Internal finishes
• o – Fittings, furnishings and equipment
• o – Services
• o – Complete buildings
• o – Works to existing buildings
• o – External works
• Risks
• Provisional sums: – Defined – Undefined
• Works to be carried out by statutory undertakers
• Overheads and profit
• Credits (for materials arising from the works)
• Fixed price adjustment
• Director’s adjustment
• Dayworks (Provisional)
• Total price (to Form of Tender)
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• Class A: General items
• Class B: Ground investigation
• Class C: Geotechnical and other specialist processes
• Class D: Demolition and site clearance
• Class E: Earthworks
• Class F: In situ concrete
• Class G: Concrete ancillaries
• Class H: Precast concrete
• Class I: Pipework – pipes
• Class J: Pipework – fittings and valves
• Class K: Pipework – manholes and pipework ancillaries
• Class L: Pipework – supports and protection, ancillaries to laying and excavation
• Class M: Structural metalwork
• Class N: Miscellaneous metalwork
• Class O: Timber
• Class P: Piles
• Class Q: Piling ancillaries
• Class R: Roads and pavings
• Class S: Rail track
• Class T: Tunnels
• Class U: Brickwork, blockwork and masonry
• Class V: Painting
• Class W: Waterproofing
• Class X: Miscellaneous work
• Class Y: Sewer and water main renovation and ancillary works
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• Class Z: Simple building works incidental to civil engineering works
Common Characteristic
• Preamble
• List of principal quantities
• Work items (grouped into parts)
• Daywork Schedule
• Grand Summary
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Measuring
• Number - sinks
• length - piping
• area - formwork
• Volume - concrete
• weight – reinforcing
• time – cabins or equipment
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Principles
• Think about how the item is constructed ?
• Any additional items needed?
• Are there categories to consider?
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CESMM4 Coding
• Reinforced in-situ concrete beam
– Each item belongs to a section such as placing in-situ concrete which is
section F.
– The first division code is to identify the type of concrete being used. If
we were using reinforced concrete it would be 7.
– The second division code identifies the element it is in, so a beam would
be 6.
– The third division further categorises the work, so if our beam has a
cross section area greater than 1m2 then it would have a code of 5.
– In a BOQ this will be F765
• Note if this was integrated with a slab it would be measured as a slab -
F742
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Measuring the beam
• Provision of concrete – F1
• Placing of concrete – F7
• Formwork –G1/2
• Reinforcement – G5
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Tender Award
• Reconciliation audit – difference
between tender price and cost
model (BoQ) ?
• Are there significant differences
between estimates and final price?
• Front end loading?
• You cannot change the final tender
price but may be able to alter unit
prices.
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Payment Terms
• Fixed Price
• Measured fixed price (BoQ)
• Cost Plus
• Cost Plus + Target Cost
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Variations
• Changes to design
• Changes to specification
• Undiscovered items
• Changes to scope
• Cost implications
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Payment
• Milestones
• Monthly valuation
• Invoices
• Reconciliation to cost model
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Working Capital Cycle
• Working Capital - cash
• Raw material-creditor
• Process - work in progress
• Stock
• Order - trade debtor
• Payment - cash
• Working Capital
Payment Working
Capital
Creditor
owe
Debtor
Owe us
Client
Raw Material
Certification
Subcontractors
Process
Work in Progress
S Curve
• An S-curve is defined as: "A display of
cumulative costs, labor hours or other
quantities plotted against time. The
name derives from the S-like shape of
the curve, flatter at the beginning and
end and steeper in the middle, which is
typical of most projects.
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S-Curve
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Final Account
• Actual Price – Out-turn Cost
the actual, total construction cost calculated at the end of the project
• Inclusion of Variations – additional costs v
removed costs
• Time related charges
• Final Out-turn cost – reconcile with
estimate
• Who pays for extras
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